Winburn's budget proposals

City of Cincinnati

City Hall, Suite 351 801 Plum Street Cincinnati, Ohio 45202 Phone Fax Email

(513) 352-5354 (513) 352-5367 Charlie.Winburn@cincinnati-oh.gov

Charlie Winburn Cincinnati City Councilman

MEMORANDUM TO: FROM: DATE: SUBJECT:

Mayor Mark Mallory and Members of Council Charlie Winburn, Member of Council December 6, 2011 2012 Preliminary Budget Update and Job Retention Concerns

City Manager Milton Dohoney has done an excellent job in presenting to Council a Recommended 2012 Budget Update. The Budget that he has presented appears to be moving in the right direction with some exceptions that I will explain later.

I want to also thank the City Manager for being honest and candid that the 2012 budget and beyond is still structurally unbalanced and he needs the Mayor and Council to give the City Administration direction about our top priorities as a city with a view toward becoming structurally balanced.

Listed below are some of my brief observations regarding the 2012 Budget Update: 1. Metropolitan Sewer District (MSD) rate increase of 8% The Metropolitan Sewer District (MSD) budget projects an 8% increase in its wastewater rate, based on the Comprehensive Wastewater Rate Study. When we take into consideration the double-digit increases customers have seen annually over the past several years, with more to come, I cannot in good conscience support this recommended increase. This definitely would have a major impact on low-income residents. According to a November 18, 2011 letter from the Sierra Club, the median income in Lincoln Heights is $18,668. A single-family home owner or renter pays 3.55% of their income to MSD. This is almost twice what U.S. EPA considers a high burden (2% of income). The median household income in Cincinnati was $33,855 in 2009 and a single-family sewer bill is 1.966% of $33,855. We need to pass a Resolution calling on the Hamilton County Commissioners to join us in opposing this rate increase.

2. Greater Cincinnati Water Works rate increase of 8.5% The Water Works’ budget includes an 8.5% rate increase to continue its water main replacement and asset maintenance projects. It has been less than a year since the last rate increase which I did not support. Nor can I support this one. Although the City Manager has attempted to justify the expenditures for which the increase in needed, it is still unacceptable.

COMMITTEES Chairman: Job Growth │ Member: Budget and Finance · Livable Communities

Mayor Mark Mallory and Members of Council December 6, 2011 Page 2

These increases together total a 16.5% rise in some of the most basic city services that our residents need. This certainly exceeds even a reasonable and expected level of inflation and is excessive. Council should vote down this increase in water rates.

3. Proposed Courtyard Atrium Project I want to again commend the City Manager for looking at the big picture of wanting to generate revenue for the City, and in particular money for the costs and maintenance of City Hall, which will in turn reduce our budget obligations. His budget is proposing to allocate $4.4 million out of our General Capital Budget to create a new venue to host special events for use by city agencies, private groups, and citizens in order to generate revenue for the City. $4.4 million is quite excessive for a project of this nature.

I think the $4.4 million needs to be set aside in an economic and neighborhood fund with a view toward attracting new businesses, creating long term permanent jobs, promoting our neighborhood business districts, improving infrastructure, streetscapes, and road repairs in some of our neighborhoods such as Bond Hill, Evanston, College Hill, Mt. Airy and Westwood.

Council should direct the City Manger to go back to the drawing board and look at other creative alternatives to support his very wonderful concept of generating new revenue for the City. Maybe the he can look at the following alternative sites that may have a greater return on investment for the city. They are as follows: a. City-owned Centennial II Building Adjacent to Proposed Courtyard Atrium Project The Centennial II Building is approximately 500 feet away from the proposed Courtyard Atrium Project and currently has 54,500 square feet of available space that has been vacant since June, 2010. Of this total, there is approximately 8,500 square feet available on the first floor which could be used for this special event center. Part of this space could be creatively renovated using the Centennial Operating Fund 340, which currently has a balance of $713,714. If done, all of the $4.4 million could be saved for the aforementioned purposes.

We are sitting on a goldmine of 54,500 square feet of city-owned office space for which we are not generating one dime of revenue and have not for 1.5 years. If the goal is to generate money, we would not have to build out a Courtyard Atrium if this space in Centennial II was aggressively marketed and rented to the private sector. We could be generating $517,750 a year at $9.50 square foot, over twice the Atrium revenue projections of only $200,000 annually. The Centennial II space is our city’s “Acres of Diamonds.” Attracting private businesses to this site is vital, particularly in light of us recently losing 400 Chiquita jobs, 800 Fifth Third Processing Center jobs, and possibly losing 2,000 jobs at the Dalton Avenue Post Office and 250 jobs at the Cincinnati Enquirer plant if these facilities close. We should be trying to create long term permanent jobs in this building.

Mayor Mark Mallory and Members of Council December 6, 2011 Page 3

b. City-owned building at 1632 Central Parkway to Connect the Streetcar As a second alternative to the proposed City Hall Courtyard Atrium Project, the City of Cincinnati should look at renovating the city-owned building at 1632 Central Parkway to host special events for use by city agencies, private groups, and citizens.

The good news for the proponents of the streetcar is that it will run directly in front of this building. This would be a better economic hub linking the streetcar with this new venue for special events. I suggest that if we renovate this particular building that the revenue be raised from federal, state and private sector monies linking the funds to the streetcar project. Although I do not support the streetcar, it looks like we’re going to have one and this option makes sense. I would support utilizing only federal, state and private sector funding for naming rights for an event center of this type at this location.

I am elated to see that the City Administration is trying to come up with creative and innovative ways to generate money for our General Fund. However, I think it would be more logical to consider the Centennial II and the Central Parkway buildings as better alternatives to the Courtyard Atrium Project.

Although I may in the minority, I hope that my colleagues will keep an open mind about my wellthought-out initiatives.

I think the initiatives that I have put forth are by far in the best interest of taxpayers. To continue to move forward with this Courtyard Atrium Project would be an absolute waste of taxpayer money.

4. Enquirer plant closing with possible loss of 250 jobs in a GO Cincinnati target area As we are addressing our 2012 City Budget, what better time than to work with the Cincinnati Enquirer to see what we can do to help them retain 250 jobs in Cincinnati at their 130,000 square foot printing plant in Queensgate. It would a sad commentary for the city to let the Enquirer plant move to Columbus or Dayton. We must fight for these 250 jobs just as we have been fighting to save the 400 Chiquita jobs, the 800 Fifth Third jobs, and the 2,000 postal worker jobs here.

Therefore, I am encouraging the Mayor and City Manager, if they have not already met with the Enquirer Publisher Margaret Buchanan, to meet with her immediately and find a way to keep them in the City of Cincinnati. As Chair of the new Job Growth Committee, which I want to thank the Mayor for his appointment, I am seriously concerned about the Enquirer plant closing which will leave 130,000 square feet of vacant space in Queensgate along with the potential vacancy of the Post Office on Dalton Avenue if they leave. If we lose the Enquirer plant and the Dalton Avenue Post Office, this will be a double blow to the Queensgate area, which is targeted for our GO Cincinnati initiative. Although we have seen some great job growth lately, this could be a 2,250 job loss for our city, most of it in this area alone.

Mayor Mark Mallory and Members of Council December 6, 2011 Page 4

If we are unsuccessful in working to keep the Enquirer plant in Cincinnati, we need to work with their management for the best utilization of that building as it relates to GO Cincinnati while we also address another loss of earnings income tax.

5. Budget Reduction Strategies with View Toward a Structurally Balanced Budget I will be submitting to Council recommended Budget reduction proposals as time goes on and I’m looking forward to seeing the recommendations of the new police chief as well as the results of my recommended audit of the Public Services Department which was supported by a 9-0 vote under the previous council. Additionally, in order to reach this all-important structurally balanced budget, I also look forward to the recommendations of my colleagues.

In summary, I will be contacting the Mayor and City Manger regarding these issues and I want to encourage you to do the same.